Company Car Allowance & House Buying

femster82

Hello,

So I have have been offered a car allowance at my work place due to promotion. Been planning on buying a house this year at some point so what would be the best option in your opinion.

Salary: £47000
Car Allowance: £5000
Deposit: £15000

1. Take the car allowance as cash - would this boost my salary for mortgage application?

2. Take the company car hire - The allowance would cover this but would it affect my outgoings column in the mortgage application?

Any advice would be helpful

kingstreet

A car allowance is treated as basic by most lenders.

If there is any negative entry on your payslip or bank statement for the car, it will probably be treated as an expense for affordability purposes.

ReadingTim

What are your current car arrangements? Surely these would have a more direct and immediate influence, rather than whether you do or don't buy a house at some indeterminate point in the future...

femster82

ReadingTim wrote: »

What are your current car arrangements? Surely these would have a more direct and immediate influence, rather than whether you do or don't buy a house at some indeterminate point in the future...

I have a car currently but with two growing babies it is not big enough to house two car seats. So a new car is needed but the house is the priority.
My main concern is what was answered above I guess, I don't know how taking the car would factor into affordability, as right now I am not paying any loans or car payments. So taking a car even on car allowance would affect my affordability?

kingstreet

femster82 wrote: »

. So taking a car even on car allowance would affect my affordability?

Ok. a little slower.

You get a car allowance as part of your income as a credit called "Car Allowance" on your payslips.

This income will be added to your basic gross annual salary and taken into account as a positive (GOOD) thing for mortgage affordability.

If you then have a car finance commitment on your payslips or car HP/PCP/lease on your bank statements this is going to be taken into account as a negative (BAD) thing for mortgage affordability.

Why not try running different scenarios on different lender online affordability calculators and gauge the difference in each situation you create for yourself?

dimbo61

So you have about £400 a month to spend on a car lease/PCP deal.
Do you have anyone at work who could help you with this ?
Big companies with lots of company vehicles sometimes have a transport office /transport manager.
Consider what size vehicle you need 4/5 door, petrol, diesel or hybrid ?
Leasing costs should include servicing costs + insurance.
If you spend less will that mean you have a higher income ?
Your company may have a policy where you Have to drive the right type of vehicle to protect the company image ( No point working for Jaguar and driving a BMW )